French, German leaders to discuss youth jobs, recovery plan

The leaders of France and Germany meet Thursday in Paris to discuss a joint plan to combat a spiralling youth jobs crisis in the eurozone which threatens the future of millions.

German Chancellor Angela Merkel will meet counterpart Francois Hollande to hammer out a common position on the subject, which will be among key issues dominating a European Union summit at the end of June.

The two leaders will first visit the Louvre for an exhibition on the main themes that structured German thinking from 1800 to 1939, before holding talks at the Elysee in the afternoon and addressing a news conference.

They will also be handed a report on promoting growth and competitiveness in Europe which is co-authored by Gerhard Cromme, the chairman of the board of Siemens, and Jean-Louis Beffa, the chairman of the board of French glass and construction material maker Saint Gobain.

Berlin and Paris have pledged a joint action plan to create more jobs for youth. Hollande has warned of a generational "rupture" if the problem is not tackled on an emergency footing.

About six million youths are officially registered as unemployed in Europe.

Merkel has called a Berlin gathering on youth unemployment on July 3 with labour ministers from all EU member states, where the initiative is expected to be officially presented. Hollande will attend that conference.

Joblessness among young people is a critical problem in many countries in the eurozone, particularly those enacting tough reforms to restructure their economies and reduce debt.

In some of these nations, the unemployment rate among youth exceeds 50 percent.

The bundle of initiatives include an EU plan which will harness six billion euros ($7.75 billion) which could be leveraged and used as guarantees to raise up to 10 times more in loans to fuel employment.

French Labour Minister Michel Sapin has said the plan would target small- and medium-sized businesses to create jobs. His German counterpart Ursula von der Leyen has echoed him saying these businesses were often ready to raise production but were hamstrung by the lack of access to cheap credit.

The European Commission said this month in a forecast that the eurozone economy will likely shrink for a second year while unemployment will rise to a record 12.2 percent.

A Eurostat report on April 30 said that a total of 5.6 million people aged under 25 were registered as unemployed in the 27-member European Union in March, of whom 3.5 million were from the eurozone.

Germany has the lowest rate of youth unemployment in the European Union, with only eight percent of the working population aged between 15 and 24 without work. In France the figure is 24 percent, while it is more than 55 percent in Greece and Spain.